WEBVTT - SVB May Spur Cash Crunch for Restaurant Tech 0:00:16.720 --> 0:00:19.400 Welcome to Chopping It Up. I'm your host, Michael Halen, 0:00:19.520 --> 0:00:23.800 Senior restaurant and food service analyst at Bloomberg Intelligence. This 0:00:23.840 --> 0:00:26.639 episode is also going to be published by my guests 0:00:26.680 --> 0:00:32.160 on their extremely informative and entertaining restaurant podcast, Hospitality Hangout. 0:00:32.159 --> 0:00:34.760 So some of you probably already know from that intro 0:00:34.880 --> 0:00:39.240 who I'm about to introduce. It's the founders and managing 0:00:39.280 --> 0:00:44.239 partners of Branded Hospitality Ventures, Jimmy Frishling aka the Finance 0:00:44.320 --> 0:00:49.080 Guy and Michael Shaftsburgh aka Shatzy aka the restaurant Guy. 0:00:51.479 --> 0:00:56.000 I get yeah. They're restaurant tours, venture capitalists specializing in 0:00:56.040 --> 0:01:00.560 restaurant tech, newsletter writers, podcast hosts, Real reniss sons men. 0:01:00.760 --> 0:01:05.440 So thanks for doing this, guys. Pleasure, pleasure being here 0:01:05.440 --> 0:01:07.920 on the podcast with it Chopping it Up, Loving it. 0:01:08.520 --> 0:01:10.360 I gotta tell you, I feel smarter just being on 0:01:10.440 --> 0:01:13.200 Bloomberg Intelligence show, like because I'm going back to my hood. 0:01:13.240 --> 0:01:15.000 I used to I used to be addicted to the 0:01:15.000 --> 0:01:19.920 Bloomberg terminal. I don't big Oh yeah, big customer, right, Jimmy, 0:01:20.000 --> 0:01:22.120 they owned you, They owned you. I was a customer 0:01:22.160 --> 0:01:28.200 for decades. Love love to still miss my Bloomberg terminal. Yeah. Well, listen, 0:01:28.200 --> 0:01:30.399 we've been trying to do something together for a long time, 0:01:30.440 --> 0:01:34.520 so this is this is exciting. Man, I'm pummed. Well, 0:01:34.560 --> 0:01:37.040 I'm a big I'm a big I read the Bloomberg 0:01:37.240 --> 0:01:40.560 News on my feet on Apple every morning. I get 0:01:40.600 --> 0:01:44.720 all my news. It's the place to golug nice like 0:01:44.840 --> 0:01:48.160 that plug out. So thanks thanks to both of you 0:01:48.200 --> 0:01:51.040 for doing this special. Thanks to you, Shatsy. I've listened 0:01:51.040 --> 0:01:52.840 to your pot enough to know that you don't like 0:01:52.880 --> 0:01:58.480 being outnumbered by finance guys. No, this is not good. 0:01:58.560 --> 0:02:01.720 I not good for me to have two finance guys 0:02:01.720 --> 0:02:04.040 and just Shatsy. That's that's not good. I'm gonna have 0:02:04.040 --> 0:02:08.800 to make it. Bring in resources. But I brought in books. 0:02:08.800 --> 0:02:10.600 I had books in my office that I brought in 0:02:10.680 --> 0:02:12.920 just I was reading last night. So I think I'm 0:02:13.000 --> 0:02:15.640 up for the challenge. Moses, you had to actually read 0:02:15.720 --> 0:02:21.160 the book. Oh no, No, I just brought the books 0:02:21.200 --> 0:02:23.080 into your office. Jim didn't read it because I called 0:02:23.120 --> 0:02:25.800 him up in here. That doesn't work. Well, listen, if 0:02:25.800 --> 0:02:28.800 it makes you feel any better, Jimmy's you know, outnumbered 0:02:28.800 --> 0:02:34.079 by a couple of jerseys. True, that's nut. Jimmy doesn't 0:02:34.080 --> 0:02:36.320 like Jersey. Don't get dogs, don't give me, don't get 0:02:36.320 --> 0:02:40.600 me started my Jersey brothers and sisters. He doesn't know. 0:02:41.800 --> 0:02:43.880 He doesn't really like it. Undist. You know there was 0:02:43.919 --> 0:02:48.720 a tunnel, us bridge and tunnel guys man Um, All right, well, 0:02:48.800 --> 0:02:52.280 let's let's get started with the brand adventures origin story shotsy. 0:02:52.360 --> 0:02:54.360 I think you were reminding your own business running some 0:02:54.440 --> 0:02:58.720 restaurants when Jimmy came to with an idea, right, yeah, Well, 0:02:58.800 --> 0:03:01.000 you know, we've had restaurants for as you alluded to, 0:03:01.080 --> 0:03:03.399 quite a few years, over twenty five years. Jimmy has 0:03:03.440 --> 0:03:07.120 been a friend of We've been friends for longer than 0:03:07.160 --> 0:03:11.960 over thirty years through mutual friends. Another one of our partners, 0:03:11.960 --> 0:03:16.880 Dean Palin and uh so. On the restaurant side, Jimmy 0:03:17.040 --> 0:03:20.840 has always been an investor of ours in our restaurants, 0:03:20.880 --> 0:03:24.440 so he's always been our restaurant partner. And I would 0:03:24.440 --> 0:03:27.600 say the extent was Jimmy had a lot of parties 0:03:27.600 --> 0:03:30.760 and events there. He drank a lot, he ate a lot, 0:03:32.800 --> 0:03:34.920 and spent a lot of time. So that was really 0:03:35.000 --> 0:03:37.800 Jimmy's most of Jimmy. He really didn't have much to 0:03:37.840 --> 0:03:39.760 do with the restaurants outside of He enjoyed it, he 0:03:39.840 --> 0:03:41.760 used it, spent all he spent a lot of money 0:03:41.800 --> 0:03:44.280 there and he paid uh, you know, so it was great. 0:03:44.280 --> 0:03:46.400 It's so it was great having to him as a 0:03:46.560 --> 0:03:49.600 customer and all that. And yeah, and and and as 0:03:49.640 --> 0:03:51.600 time went on, you know, on the restaurant side, I 0:03:51.640 --> 0:03:55.320 mean we were always very using a lot of tech 0:03:55.360 --> 0:03:57.920 and innovation on the restaurant side as a customer. And 0:03:58.000 --> 0:04:01.920 that was the extent of of of our ore, you know, 0:04:02.360 --> 0:04:05.119 getting into involved in technology and innovation. We were at customers. 0:04:06.280 --> 0:04:09.000 It was when we were renovating a restaurant Dukes on 0:04:09.040 --> 0:04:14.560 the Upper East Side that we started looking at technology 0:04:15.040 --> 0:04:18.440 to do self pooring beverage, and it was it was 0:04:18.520 --> 0:04:20.960 just it was really cool, and we're renovating this restaurant. 0:04:20.960 --> 0:04:22.240 We figured, you know, if we're gonna put all this 0:04:22.279 --> 0:04:23.600 time and money into it, we should come up with 0:04:23.640 --> 0:04:26.440 something new and innovative. And I remember talking to Dean 0:04:26.440 --> 0:04:28.080 and Jimmy like we're gonna put into self pouring and 0:04:28.160 --> 0:04:30.320 Jimmy's like, oh, that's really cool. It's awesome. And that 0:04:30.360 --> 0:04:32.000 was the extent. It was really cool and awesome, and 0:04:32.080 --> 0:04:34.640 we put this self pouring beverage system and pour my 0:04:34.760 --> 0:04:37.720 beer and we got that going. It was really cool. 0:04:37.960 --> 0:04:40.440 We were selling a lot more beer, we were saving money, 0:04:40.480 --> 0:04:42.440 there was no lost customers. We were really loving it. 0:04:42.760 --> 0:04:45.880 And to be honest, I became friendly with the founder 0:04:45.880 --> 0:04:49.440 and CEO, Josh Goodman and uh and and I just 0:04:49.520 --> 0:04:51.680 was thinking, I'm like, are you looking for investors? This 0:04:51.720 --> 0:04:55.360 seems really cool? And he's like, I am, I am, 0:04:55.400 --> 0:04:57.600 and I have a convertible note. I had no idea 0:04:57.600 --> 0:04:59.680 what a convertible note meant. Of course I pretended I did. 0:04:59.680 --> 0:05:01.280 I'm like, oh, yeah, we do that all the time. 0:05:01.720 --> 0:05:05.160 Quickly called Jimmy. I'm like, Jimmy, you know, Jimmy loved 0:05:05.160 --> 0:05:06.599 the self boring paverage. This is is. I told me there 0:05:06.640 --> 0:05:09.479 was an investment opportunity. It's a convertible note. And that 0:05:09.600 --> 0:05:11.640 was really how it got started. And then Jimmy kind 0:05:11.640 --> 0:05:13.880 of took over with his finance cap and you know, 0:05:14.279 --> 0:05:16.360 met Josh and that's kind of like, really how it's 0:05:16.360 --> 0:05:19.760 spotted it the real skinny. That was our first investment. 0:05:20.000 --> 0:05:22.120 And Jimmy, I still don't know what a convertible note is. 0:05:22.200 --> 0:05:24.520 Jimmy has still hasn't told me, but that's how we started, 0:05:25.160 --> 0:05:26.920 you know, Mike going, I think chats person of all 0:05:27.000 --> 0:05:29.640 that's accurate and the truth always sounds better. What I 0:05:29.680 --> 0:05:34.880 would say is, through working with Chatsy and our restaurant operators, 0:05:34.880 --> 0:05:37.880 what I discovered when I besides putting somebody to work, 0:05:37.880 --> 0:05:40.360 and the Chatty accuses me of eating and drinking too 0:05:40.400 --> 0:05:42.400 much or for free I paid up front, then I 0:05:42.400 --> 0:05:45.720 just kept eating and drinking. But but what Chatsy kind 0:05:45.760 --> 0:05:48.560 of brought brought awareness to me of was that it 0:05:48.680 --> 0:05:51.200 was all this technology being created for the industry, but 0:05:51.320 --> 0:05:53.560 that a lot of operators and the users of the 0:05:53.600 --> 0:05:57.039 tech were being less consulted. And I argue that this 0:05:57.080 --> 0:06:02.200 industry is the most misunderstood because everyone applies their guest 0:06:02.279 --> 0:06:06.440 experience to what they think is actually going on at 0:06:06.480 --> 0:06:10.040 these venues, and they therefore have a false sense of familiarity. 0:06:10.640 --> 0:06:12.520 And I'm not blaming the guests. In fact, we as 0:06:12.680 --> 0:06:15.880 restaurant owners would even call them customers. We call them guests. 0:06:15.920 --> 0:06:18.600 We want the relationship, We want them to feel comfortable. 0:06:18.800 --> 0:06:21.400 But what we observed, and I said to Chatsy, you're 0:06:21.440 --> 0:06:24.280 an SME, he said, what's that? As a subject matter expert? 0:06:24.360 --> 0:06:27.000 He said, what's that. I said, you are an operator, 0:06:27.000 --> 0:06:31.240 you're using this tech. The technologist should be speaking to 0:06:31.279 --> 0:06:34.240 you about the product market fit. And I've never seen 0:06:34.279 --> 0:06:38.080 an asset class that was, in my opinion, maybe not 0:06:38.360 --> 0:06:42.600 leveraging the available talent and experts that are that were available, 0:06:42.760 --> 0:06:44.920 and that's what we tried to harness. So after making 0:06:44.920 --> 0:06:47.680 a few investments as as more of a hobby, we 0:06:48.200 --> 0:06:50.680 formalized Brandon and here we are, you know, almost five 0:06:50.760 --> 0:06:54.680 years later. As an remember I mean our first I 0:06:54.680 --> 0:06:57.119 don't know, our first half a dozen investments. I think, Jimmy, 0:06:57.360 --> 0:07:01.200 we're really done just through Jimmy, myself and our partner Dean. 0:07:01.560 --> 0:07:05.680 Jimmy was still doing his whatever he was, Yeah, he 0:07:05.720 --> 0:07:08.600 had a whole other business going on, and Dean was 0:07:08.640 --> 0:07:10.480 in real estate, and I was still running the restaurants. 0:07:10.560 --> 0:07:12.160 So we were just you know, so it really and 0:07:12.200 --> 0:07:14.160 then it just took off. And I think that's what 0:07:14.280 --> 0:07:17.880 really makes you guys unique, being subject matter experts, being 0:07:17.920 --> 0:07:20.640 actually able to test some of these things in your 0:07:20.680 --> 0:07:25.640 restaurants is very unique in the industry, and it's pretty cool. Uh, Jimmy, 0:07:25.680 --> 0:07:27.720 can you talk a bit about your Core four that's 0:07:28.000 --> 0:07:30.280 your nickname for the ecosystem that that you guys have 0:07:30.360 --> 0:07:33.600 helped create, because I think that's another thing that really 0:07:33.640 --> 0:07:37.800 sets branded apart. Yeah, and thank you. I A. I 0:07:37.880 --> 0:07:40.240 love the core four because it rhymes. It's always fun 0:07:40.320 --> 0:07:44.560 for me, a simple man that core files terrible what 0:07:44.680 --> 0:07:46.960 we came up without three? It was originally the core 0:07:47.000 --> 0:07:50.080 file drop Yeah, But now in all seriousness, the core 0:07:50.160 --> 0:07:55.240 four is our ecosystem. It is the community that we 0:07:55.280 --> 0:07:57.800 take very seriously. And I have to say, as a 0:07:57.880 --> 0:08:01.800 recovering Wall streeter um, the community that is in and 0:08:01.840 --> 0:08:05.520 around food service and hospitality is really quite a wonderful community. 0:08:05.520 --> 0:08:08.800 And if you've worked in the industry, you understand the camaraderie, 0:08:08.840 --> 0:08:10.520 the team work, the rolling eperence when he's getting your 0:08:10.520 --> 0:08:13.760 hands dirty. But the Core four is first and foremost 0:08:13.760 --> 0:08:17.720 the partner companies, the portfolio companies we invest in, and 0:08:17.760 --> 0:08:20.040 that's forty five of them, and they are a key 0:08:20.080 --> 0:08:23.200 part and the companies we're soliciting and seeking to bring 0:08:23.240 --> 0:08:25.680 on as our partner companies. These are the folks that 0:08:25.760 --> 0:08:28.640 are creating and developing the tech and innovation that is 0:08:28.680 --> 0:08:32.240 operator centric. Our number one rule of investing is the 0:08:32.280 --> 0:08:36.040 technology has to be an ally and good for the operator. 0:08:36.080 --> 0:08:38.679 We're a B to B investor. We want to embolden 0:08:38.760 --> 0:08:43.920 operators to leverage tech to maximize margin optimization and bring efficiencies. 0:08:44.200 --> 0:08:46.720 We do not want to work with tech that goes 0:08:46.800 --> 0:08:50.240 through the operators and to the guests because inevitably, we 0:08:50.280 --> 0:08:53.400 think it creates friction and competition of who is the 0:08:53.480 --> 0:08:57.120 guest loyal to. So as long standing operators, we've chosen 0:08:57.160 --> 0:09:00.400 to be on the side of other restaurateurs and focus 0:09:00.400 --> 0:09:03.280 on them, and that dovetails into the second vertical or 0:09:03.280 --> 0:09:06.600 the second you know a member of our core four, 0:09:06.679 --> 0:09:09.440 which is a hospitality network. Those are just that the 0:09:09.520 --> 0:09:13.600 owners and operators of venues that sell and serve F 0:09:13.760 --> 0:09:17.000 and B. So while it's dominated by restaurants, it includes 0:09:17.160 --> 0:09:22.320 hotels and airports and stadiums and arenas and beer gardens 0:09:22.480 --> 0:09:25.160 anywhere F and be sold and served. That's the network, 0:09:25.200 --> 0:09:28.079 and we invite the network to join us on this 0:09:28.160 --> 0:09:31.120 journey of identifying and vetting and validating tech and innovation. 0:09:31.320 --> 0:09:34.280 The syndic is probably the most self explanatory. Other investors 0:09:34.920 --> 0:09:39.319 and strategic connections are those that have a not just 0:09:39.400 --> 0:09:43.480 a desire to see this industry survive, but actually want 0:09:43.480 --> 0:09:45.800 to see it thrive. These are the folks and very 0:09:45.880 --> 0:09:49.200 large firms that sell into this industry. Ecolab, the leading 0:09:49.280 --> 0:09:52.840 kitchen start, the leading food safety firm in the market 0:09:53.000 --> 0:09:56.239 over three hundred thousand restaurants, Middle Being the leading kitchen manufacturer, 0:09:56.600 --> 0:09:58.800 Coke and Pepsi. Pepsi wants to sell a lot of food, 0:09:58.840 --> 0:10:00.880 a lot of snacks, and a lot of averages. They 0:10:00.960 --> 0:10:03.520 want this industry to fraud and we found that this 0:10:03.640 --> 0:10:08.640 combination allows us to accelerate our young companies. The network, 0:10:08.720 --> 0:10:11.400 the syndicate and the connections. The joke on us says, 0:10:11.400 --> 0:10:13.880 we don't charge any of these folks, um and how 0:10:13.880 --> 0:10:15.960 do we make money? Volume but a bump. But no, 0:10:16.080 --> 0:10:19.040 in all seriousness, we invest in early stage companies and 0:10:19.160 --> 0:10:22.680 we leverage this network, the syndicate and the strategic connections 0:10:22.720 --> 0:10:25.560 to really advance these companies that are in line with 0:10:25.600 --> 0:10:29.240 our vision to improve margins and efficiencies for this industry. 0:10:29.240 --> 0:10:32.120 We love. So that was a longer explanation, Mike than 0:10:32.160 --> 0:10:33.679 you wanted. The chats is like, wow, he did that 0:10:33.720 --> 0:10:37.840 short of than expected. No, that was it. That was 0:10:37.880 --> 0:10:41.120 about right. That was solid solid. That was the core four. 0:10:41.400 --> 0:10:44.800 Could you imagine it was the core eight? I mean 0:10:44.840 --> 0:10:48.000 it would be the stays. That's why I actually that's 0:10:48.000 --> 0:10:50.280 what initially was the core. Right now, I said, you know, 0:10:50.400 --> 0:10:52.640 I can't go on these calls anymore, Jimmy unless we 0:10:52.720 --> 0:10:55.080 chop we got were the four things core four because 0:10:55.120 --> 0:11:01.439 we got fifteen minutest down. But which it's important and 0:11:01.880 --> 0:11:04.640 it's it's uh, it's super smart and uh and I 0:11:04.679 --> 0:11:07.760 love it. Um. So we got a lot to talk 0:11:07.760 --> 0:11:09.480 about today. I want to talk a lot about the 0:11:09.480 --> 0:11:13.800 companies that you're invested in. You know, this is the primary, uh, 0:11:13.840 --> 0:11:16.240 you know, reason for for me inviting you guys was 0:11:16.280 --> 0:11:18.240 to really dig into some of the companies that that 0:11:18.320 --> 0:11:21.199 you're investing. But but there's an eight hundred pound gorilla 0:11:21.240 --> 0:11:24.280 in the room, and uh that's Silicon Valley Bank. So 0:11:24.320 --> 0:11:26.880 before we get into all the good stuff, I feel 0:11:26.880 --> 0:11:30.240 like no one ever really heard of sb SVB except 0:11:30.280 --> 0:11:33.480 for you know, except for startups and some venture formally, 0:11:33.520 --> 0:11:35.920 anyone ever heard of this. It's like Chase Bank of America, Well, 0:11:36.800 --> 0:11:38.880 what the hell is that? Well, I don't know that 0:11:38.960 --> 0:11:41.839 many you know, millionaires and billionaires, and so that's why 0:11:41.840 --> 0:11:44.000 I've never heard of Silicon bat right, Like that's the 0:11:44.000 --> 0:11:49.160 only people they uh they banked for so yeah. In 0:11:49.200 --> 0:11:51.960 the venture in the venture world, in the early stage starts, 0:11:52.000 --> 0:11:54.480 everyone knows SVB. But I mean, like I was out 0:11:54.480 --> 0:11:57.000 for dinner last night with some friends. I mean outside 0:11:57.000 --> 0:11:59.120 of the news, they had no they had it had 0:11:59.160 --> 0:12:03.200 no effect on their life. They could care lesson nothing. 0:12:03.480 --> 0:12:07.880 They're in different industries, no effects in Massachusetts. Try to 0:12:07.920 --> 0:12:11.559 find went to the SPB branch that he could find 0:12:11.600 --> 0:12:15.200 in Massachusetts and found that it wasn't affiliated. It wasn't 0:12:15.240 --> 0:12:17.400 There was no trip, it was no banking branch there, 0:12:17.440 --> 0:12:20.640 there was no SBB branch, and yet he had he 0:12:20.679 --> 0:12:23.840 had yes private wealth, and yet he had money. With 0:12:23.880 --> 0:12:28.400 this movie, He's like, where's the branch, where's the bank? Yeah, 0:12:28.480 --> 0:12:30.559 it's called online back. And I think that's one of 0:12:30.600 --> 0:12:32.760 the things about SPB. It's running because before this all 0:12:32.800 --> 0:12:35.559 went down, no joke, I was talking to somebody about 0:12:35.559 --> 0:12:37.839 how much we loved SVB because set it for the 0:12:37.840 --> 0:12:41.640 account with them was all digital is super easy, you know, 0:12:41.720 --> 0:12:45.040 with thank you America and Chase Whill be nice. Nice. 0:12:45.080 --> 0:12:48.679 We need those guys, No, very nice, nobody. It's old school. 0:12:48.679 --> 0:12:50.840 It's like you want to open account, it's old it's 0:12:50.960 --> 0:12:55.079 you know, wet ink signature on a PDF, backs it 0:12:55.200 --> 0:12:57.920 back to me or email it back to SVB. It's 0:12:57.960 --> 0:13:00.560 all digital. It's they you don't speak to anybody, so 0:13:00.600 --> 0:13:02.360 it's just injury. So it's a very it's a very 0:13:02.800 --> 0:13:05.200 hip way of doing business. Or it was a very 0:13:05.240 --> 0:13:09.800 hit for sure. So you know, things are changing quickly. Jimmy, 0:13:09.800 --> 0:13:12.840 you did a great job in the newsletter addressing the topic. 0:13:13.960 --> 0:13:16.960 You know, what, if any, are the lasting implications of 0:13:17.040 --> 0:13:21.000 the bank's failure on the tech industry. Yeah, it means 0:13:21.000 --> 0:13:23.240 a little bit of PTSD. I have to admit on 0:13:23.360 --> 0:13:27.280 Thursday afternoon when the news was coming across the wires, 0:13:27.760 --> 0:13:29.400 it was actually a great week last week. There was 0:13:29.400 --> 0:13:31.520 a lot of very good work for branded and securing 0:13:31.600 --> 0:13:34.559 capital for ourselves and some of our companies. And I 0:13:34.640 --> 0:13:36.880 was having a nice week and then got the news 0:13:36.960 --> 0:13:40.400 n SVB and it reminded me a lot of fat 0:13:40.440 --> 0:13:43.520 rewind fifteen years ago or so with the Great Recession. 0:13:44.200 --> 0:13:47.439 First of all, my expectation and not that this is 0:13:47.480 --> 0:13:50.440 a perfect solution, but I do think the Fed, the Treasury, 0:13:50.440 --> 0:13:53.520 and the FDSC got it right. And the question was 0:13:53.559 --> 0:13:56.600 the speed of which they had to announce that all 0:13:56.640 --> 0:14:00.400 depositors were. In fact, I'm going to be checked it 0:14:00.400 --> 0:14:03.679 and essentially guaranteed. I noted when I was coming to 0:14:03.760 --> 0:14:07.640 work on Monday morning, how somewhat peaceful it was walking 0:14:07.679 --> 0:14:10.040 from the subway age of the office, and I was thinking, 0:14:10.040 --> 0:14:12.600 had they not done this, what would today have looked like? 0:14:12.720 --> 0:14:15.280 Because I think we would have had a meaningful bank run, 0:14:15.520 --> 0:14:17.520 you know, I think one of the things that's changed. 0:14:17.559 --> 0:14:20.080 And we're still dissecting all of this, but I do 0:14:20.160 --> 0:14:22.840 think social media, and it's not a blame of social media, 0:14:22.920 --> 0:14:25.080 but when we've dealt with the Great Recession and in 0:14:25.200 --> 0:14:30.040 previous crisises or in previous spats of great volatility, we 0:14:30.120 --> 0:14:33.680 have not had the fluidity and the speed of which 0:14:33.720 --> 0:14:36.000 things can go viral, the speed of which a Peter 0:14:36.160 --> 0:14:38.560 Teal could send out a notice or send out a 0:14:38.560 --> 0:14:42.480 message and through Twitter and social media and otherwise it 0:14:42.520 --> 0:14:45.200 goes viral. And for if you're a holder of an 0:14:45.240 --> 0:14:49.800 account at a SBB or another meaningful regional, the ease 0:14:49.840 --> 0:14:51.920 of which you go online to move money and take 0:14:51.960 --> 0:14:54.640 it out or withdraw it is very fluid now. So 0:14:54.680 --> 0:14:57.560 I think it accelerated and exacerbated the crisis. It is 0:14:57.600 --> 0:15:01.000 not a perfect solution to guarantee the depositors. It is 0:15:01.040 --> 0:15:03.480 the right solution, but I will tell you that there 0:15:03.480 --> 0:15:06.440 does issue. Some concerns are on moral hazard. I do 0:15:06.480 --> 0:15:09.920 think there are other banks now some Signature already went under, 0:15:10.560 --> 0:15:14.440 was taken over republics under some pressure. A behemoth like 0:15:14.480 --> 0:15:16.960 Credit Swiss. People have been looking at its balance sheet, 0:15:17.000 --> 0:15:21.040 its financials. The fact is no bank could withstand an 0:15:21.040 --> 0:15:24.720 exodus of the type of monumental proportion of deposits that 0:15:24.920 --> 0:15:27.000 was at risk of happening. So at the end of 0:15:27.040 --> 0:15:29.800 the day, depositors may very well need to be guaranteed. 0:15:30.200 --> 0:15:32.520 But then the question is is how do we almost 0:15:32.520 --> 0:15:35.760 convert this into utility, meaning the banking system, because you 0:15:35.840 --> 0:15:39.320 can't have you know, these ballouts. And let's be clear, 0:15:39.360 --> 0:15:42.360 it's not called a ballout because the taxpayers not on 0:15:42.400 --> 0:15:48.040 the hook. Let me tell you something terrible. Any losses, 0:15:48.280 --> 0:15:51.800 any losses on SVB or Signature are gonna have to 0:15:51.840 --> 0:15:53.960 be paid for, and it might be paid for in 0:15:54.000 --> 0:15:56.680 an assessment on these banks, which may then be paid 0:15:56.680 --> 0:15:59.360 for by an increase in any number of fees that 0:15:59.400 --> 0:16:01.880 are charged to the consumer. So it's never going to 0:16:01.960 --> 0:16:03.960 be free. But I will tell you that I still 0:16:03.960 --> 0:16:06.720 think we're it's always paid for by the taxpayers, so 0:16:06.880 --> 0:16:09.200 one way or another, right Jimmy, Yes, so yes, and 0:16:09.240 --> 0:16:12.200 we're working through it. For branded. Our book of business 0:16:12.200 --> 0:16:14.120 has weathered the storm as well as I ever could 0:16:14.120 --> 0:16:18.080 have asked, and we banked with SVB. We weren't getting 0:16:18.080 --> 0:16:20.080 loans from them, we weren't getting investments from them, we 0:16:20.080 --> 0:16:22.880 weren't borrowing from them. I do think to your question 0:16:22.920 --> 0:16:25.120 Mike on what's going to do to the industry, I 0:16:25.160 --> 0:16:27.640 do think there is a concern that there are a 0:16:27.720 --> 0:16:30.360 number of very large players that were getting a lot 0:16:30.360 --> 0:16:33.800 of their fuel and the oxygen from the likes of 0:16:33.800 --> 0:16:36.760 an SVB or another regional and my concern is that 0:16:36.880 --> 0:16:39.200 that is removed, which it is. No venture death's going 0:16:39.240 --> 0:16:41.560 to come. Venture death gonna be more expensive if it's 0:16:41.560 --> 0:16:43.440 available at all. So I do think there are a 0:16:43.480 --> 0:16:46.600 few levers in the world of finance which are greasing 0:16:46.640 --> 0:16:49.640 and supplying oxygen to the system that are now going 0:16:49.680 --> 0:16:51.480 to be shut off. So I certainly think there was 0:16:51.520 --> 0:16:53.680 a lot of headwinds in our industry. A big correction 0:16:54.000 --> 0:16:56.800 this is going to contribute to that. I'm expecting sixty 0:16:56.920 --> 0:17:00.480 ninety days at least of dissecting what transpired. And it 0:17:00.520 --> 0:17:02.880 may be longer, but I think we're it's contributing to 0:17:02.880 --> 0:17:05.520 a risk off environment, which is obviously a problem for 0:17:05.640 --> 0:17:08.800 many young companies. But I will say a greater tragedy 0:17:08.960 --> 0:17:12.480 was averted the right decision was made to guarantee deposits, 0:17:12.520 --> 0:17:16.040 even though there was no perfect solution. I agree. I 0:17:16.119 --> 0:17:19.800 agree with what you're saying there, Jimbo. One day, the 0:17:19.840 --> 0:17:25.800 weekend was was really just hectic and everyone's scrambling. Were 0:17:25.800 --> 0:17:28.560 these companies. I mean, from our perspective, where our partner 0:17:28.560 --> 0:17:30.359 companies you may make payroll. I mean all they were 0:17:30.359 --> 0:17:32.160 gonna have was two hundred and fifty grand. That's all 0:17:32.200 --> 0:17:36.720 they were gonna have. And that doesn't go very far, no, 0:17:37.240 --> 0:17:40.440 wet Mike. We had to do the work forty five companies. 0:17:40.480 --> 0:17:42.040 Who do they bank with? Who else they bank with? 0:17:42.200 --> 0:17:45.960 Who's with SVB, Who's got liquidity? What are people's runways 0:17:45.960 --> 0:17:49.360 in light of the frozen capital, all the while expecting 0:17:49.760 --> 0:17:53.200 the Fed or Treasury or FDSC to announce the guarantee deposits. 0:17:53.359 --> 0:17:55.280 But you couldn't rely on that. So a lot of 0:17:55.640 --> 0:17:57.800 lines of you know, a lot of liquidity was being 0:17:58.119 --> 0:18:02.240 amassed quietly in case that the right decision wasn't reached. 0:18:02.280 --> 0:18:05.960 So but if you Saturday morning, Saturday morning, they were 0:18:06.000 --> 0:18:09.000 saying they were not garry, they were two fifty. That 0:18:09.160 --> 0:18:11.320 was it. Saturday morning, That's what they were saying. So 0:18:11.560 --> 0:18:15.920 wasn't until really Sunday. So well, Mike pleased to call 0:18:16.000 --> 0:18:19.879 to yelling and said, listen, let's gett Listen to me, listen, 0:18:20.000 --> 0:18:23.240 let's go. We're going. We're going. I got Jimmy and shatsy. 0:18:23.280 --> 0:18:24.920 I'm chopping it up. I got a good I got 0:18:25.040 --> 0:18:28.760 a good story. Tell me what'sppen. Well, it sounds like 0:18:28.800 --> 0:18:30.399 Jimmy's got some work to do now. He's got to 0:18:30.440 --> 0:18:32.320 teach her at forty five companies how to how to 0:18:32.400 --> 0:18:37.120 ladder T short term T bills, Yes, yes, custodial accounts. 0:18:37.119 --> 0:18:38.960 We gotta we gotta work on a lot of places 0:18:39.200 --> 0:18:41.679 to hold liquidity. There are a lot of ways to 0:18:41.720 --> 0:18:45.320 do it today. It was very busy on Monday, all 0:18:45.359 --> 0:18:47.439 the people at Chase and b of A because they 0:18:47.480 --> 0:18:51.080 were setting up new accounts. It's like crazy, yeah, because 0:18:51.680 --> 0:18:54.080 you know, our bankers were going nuts just setting up 0:18:54.080 --> 0:18:57.040 new accounts. Yeah, because those two aren't going anywhere. So 0:18:57.760 --> 0:19:00.560 if you think about the size of deposits, I believe 0:19:00.720 --> 0:19:02.480 the size of the you want to use the core 0:19:02.560 --> 0:19:06.280 for another way, City Bank, JP, Morgan, Bank of America, 0:19:06.320 --> 0:19:09.400 Wells far ago. Since the Great Procession, I think they 0:19:09.440 --> 0:19:12.520 now control almost ninety percent of the deposits of this country. 0:19:12.600 --> 0:19:16.720 They've only increased in size. Too big to fail now 0:19:16.800 --> 0:19:19.040 became too big not to banque like you have to 0:19:19.080 --> 0:19:21.800 bank with them almost, which is going to be really 0:19:21.800 --> 0:19:23.520 I think a challenge in whether or not they should 0:19:23.520 --> 0:19:26.720 be utilities more than than something other than Yeah, if 0:19:26.720 --> 0:19:28.840 you think about SVB, they said it was the thirteenth 0:19:28.920 --> 0:19:32.280 largest by deposit. The spread between the number one and 0:19:32.280 --> 0:19:36.080 two and three and thirteen, it's it's quite quite a 0:19:36.119 --> 0:19:39.320 big spread. You'd think that thirtail's that's pretty big, not 0:19:39.440 --> 0:19:42.320 compared to number one, two and three. Yeah, you'd think 0:19:42.320 --> 0:19:46.120 we'd want to diversify a risk, but apparently that's we've 0:19:46.160 --> 0:19:50.119 gone the opposite ways in the last forty or so years. 0:19:51.200 --> 0:19:56.440 All right, cool, thanks for that. M let's see schatsy, 0:19:56.560 --> 0:19:59.200 how many how many funds we got forty five? Wait? 0:19:59.240 --> 0:20:01.440 How many fun does branded have? You have forty five 0:20:01.600 --> 0:20:04.119 companies that you're invested in. How many funds is branded 0:20:04.200 --> 0:20:09.359 have and you know, out of those forty five companies 0:20:09.359 --> 0:20:11.960 that you've invested in, you know, do you have any 0:20:12.000 --> 0:20:14.399 successful exits that you'd like to bring And that's a 0:20:14.440 --> 0:20:20.400 great question. We had forty five investments. We were fortunate 0:20:20.400 --> 0:20:25.400 to have a couple of exits. So our earliest investments Bbot, 0:20:25.480 --> 0:20:30.240 which was a order and pay with the phone using 0:20:30.359 --> 0:20:34.040 QR codes, which probably doesn't sound that cool and happening 0:20:34.119 --> 0:20:38.199 right now because since the pandemics, QR codes became all 0:20:38.240 --> 0:20:41.000 the rage. QR codes has been around since ninety four. 0:20:41.040 --> 0:20:44.280 I don't think people paid much attention to QR codes. 0:20:44.520 --> 0:20:46.720 I know most people looked at them a little weird. 0:20:46.720 --> 0:20:48.119 They're like, I don't know what that is. I'm certainly 0:20:48.160 --> 0:20:49.479 not gonna use it because I don't need to use 0:20:49.480 --> 0:20:52.960 it and what it is. Pandemic came and boy that changed. 0:20:53.160 --> 0:20:56.960 But so we invested in Bbot. Uh. You know, fortunately 0:20:57.040 --> 0:20:59.760 we saw that kind of trend where your phone was 0:20:59.760 --> 0:21:01.840 a great way to order and pay. Going back to 0:21:02.080 --> 0:21:04.680 um to Dukes one of our restaurants on the Upper 0:21:04.680 --> 0:21:07.680 East Side, as we put in the self pouring beverage 0:21:07.720 --> 0:21:12.680 system on another technology that we kind of brought on 0:21:12.760 --> 0:21:15.439 and and test it out. Was order and pay with 0:21:15.480 --> 0:21:17.960 the phone, a little QR codes on the tables and 0:21:18.040 --> 0:21:22.080 again this was back in like seventeen or eighteen, and 0:21:22.119 --> 0:21:24.399